Highlights

  • US-origin container scrap into Taiwan held at US$350/t for a second week, with no Japanese or US bulk quotes.
  • Bellwether mill Feng Hsin cut rebar by NT$200/t on 9 Nov as billet eased and Demand stayed weak, leaving mills no appetite to pay more for scrap.
  • Sideways trade near US$345-350/t is likely; watch Feng Hsin's next weekly list, Japanese offers and any US scrap diverted from Turkey.

Taiwan's scrap Import price has flatlined as the island's price-setting mini-mill trims rebar and Japanese sellers stay too expensive to matter.

What happened

Taiwan's import scrap market is going nowhere. US-origin container scrap held at US$350/t for another week, according to the raw-material prices reported with Feng Hsin Steel's weekly price list. It was also US$350/t a week earlier.

There were no quotes this week for US bulk cargoes or Japanese H2, the other benchmarks Taiwanese mills usually track.

The bigger news came from the mill side. Feng Hsin, the island's bellwether electric-arc producer, cut its rebar price by NT$200/t to NT$18,300/t, its first reduction since mid-August, while holding its scrap purchase price at NT$10,100/t.

Feng Hsin's scrap purchase price sat at NT$9,800/t through mid-October before rising to NT$10,100/t on 27 October, where it has stayed for three weeks. Its rebar list rose NT$200/t that same week, so this week's cut fully reverses it.

Fresh data on this market is thin. US-origin containerised HMS 80:20 was assessed at US$345/t CFR in mid-October, with only a US$1/t weekly rise reported in early November. The LME's CFR Taiwan futures showed about US$345.20/t across the curve on 11 November, with no trades.

Why it happened

Rebar demand is the problem. Feng Hsin deputy general manager Chuang Wen-che said international billet prices eased slightly and southern Taiwan prices could not rise, so central and northern prices had to fall to meet buyers' expectations.

When the region's price leader cuts its finished product, mills have no appetite to pay more for raw material. Feng Hsin kept its scrap price flat, and earlier this month it said rebar demand remained relatively weak even in what is normally a fourth-quarter peak season.

Japan has priced itself out. Taiwanese buyers have focused on ex-US scrap because Japanese offers are very high, and Japanese material was still seen as expensive in early November.

On the other side, US suppliers have little reason to discount. Some US domestic markets settled US$20-30 per gross ton higher for November on firm mill demand, which props up export offers into Asia.

How it plays out

The gap between buyers and sellers is not new. In mid-October, Taiwanese bids sat near US$345/t CFR while US offers were US$350-355/t, and sluggish rebar sales limited buying despite firmer overseas offers. Nothing in this week's data suggests that gap has closed.

That leaves Taiwan squeezed between firm overseas sellers and soft local steel. The most likely result is more sideways trade at around US$345-350/t CFR, with small container deals rather than big bookings.

The winners are Taiwanese mills that can lean on domestic scrap at NT$10,100/t and buy imports only when needed. The losers are US container exporters facing a buyer that will not pay up, and Japanese sellers missing out on a traditional outlet.

A softer Turkish market could change the maths. If Turkish demand fades after the Habas blast, as early cuts in Baltic offers suggest, more US scrap could be redirected to Asia, adding pressure on prices into Taiwan.

Next week, watch Feng Hsin's next Monday price list, any comments at its online investor conference on 12 November, and whether Japanese H2 offers return to Taiwan at workable levels.